Inherited Roth RMD requirements

[rcroane]

I have an Inherited Roth that I inherited in 2013 so it is NOT subject to the 10 year rule.   Are RMD's waived for this type of Roth for 2024?  My understanding is that they have been waived for inherited Roth's subject to the 10 year rule, but I've read conflicting information about whether the waiver applies to Inherited Roth's that are not subject to the 10 year rule.  Turbo Tax is telling me my RMD for my Inherited Roth is zero for 2024 based on the information I input, including the date of inheritance.

Thanks for any help.

[dmertz]

Waiver of the penalty for not taking an RMD for 2024 only applies to those required to take RMDs under the 10-year rule.  If you failed to take the RMD for 2024 from the inherited Roth IRA, that's subject to penalty unless you take the distribution late (in 2025) and request a waiver of the penalty on Form 5329 Part IX.  (TurboTax makes it difficult to prepare such a Form 5329 unless you are subject to RMDs from your own retirement accounts, so you might need to prepare this Form 5329 and include it with your mailed tax return.)  See the instructions for Form 5329 Part IX for how to request the waiver:

https://www.irs.gov/pub/irs-pdf/i5329.pdf

Unless they've changed something, I don't think that TurboTax has the ability to determine the amount that you were required to take.  That's information that you yourself must determine and enter into TurboTax.

[rcroane]

Thank you.  What's interesting is that based on the information I input during the TT interview, including the date I inherited the Roth, TT says my RMD is zero.  And I only have the one account at this time that requires an RMD.   I assume there is a flaw in TT where it thinks the waiver applies to all inherited Roth's, not just those subject to the 10 year rule.

I will pull Form 5329 into my TT return and fill in the required info.  In my case, I took most of the RMD in 2024, but did a slight miscalculation and I missed about $1,700.  Penalty will be about $170 so no big deal.

[dmertz]

Without having received a distribution from the inherited Roth IRA and having no Form 1099-R to enter, I don't think that TurboTax can even know that you have an inherited Roth IRA, let alone calculate any RMD for this account.  I think that you might be misinterpreting something in TurboTax.  I've never encountered a situation where TurboTax offers to calculate any RMD for me.

[rcroane]

Sorry, I wasn't quite clear.  I did take an RMD, just not large enough.  I was supposed to take a little over $15,000, but I only took $13,500.  I didn't realize it until after 1/1.  I corrected it in early January.   I did receive a 1099-R for the $13,500.  

[dmertz]

In that case, when you enter the Form 1099-R and indicate that your RMD was to be $15,000 from this account but the Form 1099-R shows only $13,500 in box 1, TurboTax will prepare 2024 Form 5329 and offer the option to request a waiver of the penalty on the late-taken $15,000.  Be sure to take the late $1,500 as soon as practical before filing your tax return.  That will then appear on your 2025 Form 1099-R along with your 2025 RMD.